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09-02-2012 10:10 PM
I think the OP may be confused about Cap1 reporting.
Cap1 used to not report credit limits, but instead, would report your highest balance you've ever run up as your limit.
For example: I could have a card with a $3,000 limit, however, if I'd never charged more than $300 on the card, $300 is what would report as my limit to the bureaus.
That practice of their's has stopped occuring though, and they now do report your credit limit.
Running up a balance on your card isn't a bad thing to do as long as you have the money to pay it back. Had you maxed out your card, and had no means to pay it back and planned on carrying the balance for months, then you would be in a bad situation, however, you seem responsible and know that you'll be able to pay it off immediately.
Hope this helps
09-02-2012 10:12 PM
You will be fine. Any score drop you see will be temporary and will not hurt you. With only a $500 limit that card is way too easy to "Max" Have your husband check out the zync by amex or maybe a different charge card product. It may fit your needs better if used responsibly.
He does need one. For his job he travels a lot so having a credit card is handy for cases where it is necessary. Car rental agencies ( or at least the ones he goes to ) look for him to have one so they can hold the balance on the account and then later charge him on his debit card when he returns the car thus dropping the hold on the CC. I'd love to see at least maybe 1,000 or higher, but I'm terrified of credit cards and have no desire to use them except for shining up our credit.
I was thinking of potentially asking Capital One if they can give us an increase, but from what I've read here, they're rather stingy about that.
09-02-2012 10:17 PM
Thanks guys so much for the answers! For safety, I plan to just put down the entire thing this Friday. I don't think I can take the risk of even having it stay on our next statement even though technically it won't be past due. Going to keep my $0 balance to save me peace of mind. Here's hoping it doesn't jab our credit score too badly and our lending process with the auto loan goes smoothly without any hiccups! I am relying on this 675 score. Dealership said we were approved when we filled this out on Friday, buuut... there is always that chance the bank can go back, look at the score and see it went down 10 or 30 points, and take back their loan.
I know I'm thinking of the worst case scenario but this whole auto loan and credit thing has me paranoid.
Hi, I'm worrying a ton. Nice to meet you. ):
09-02-2012 10:23 PM - edited 09-02-2012 10:24 PM
Seriously tell him to check out the zync for his travel. It can handle the spending. I got mine in Feb... my "limit" is over 6k now. There is no way to accumulate debt with this card as you are required to pay the full amount off every month. It also does not count against you in the utilization department. My husband and I use this card for all of our needs.
09-02-2012 10:40 PM
We might do that in the future. For now, trying to manage as few accounts as possible until next year or two.
I'm wondering if I should try and get our credit limit increased so that it will not look that bad. It will look even weirder if - though I doubt it - we ever decided to lower our limit back to 300 or something. Then it will show $500 being the highest amount charged on a $300 credit card limit. Ick. So maybe increasing our limit is the only way to make it not look so weird if it does report that next update... which I know it will.
No matter. I think for now on we'll just make one small purchases every two months on it and pay it off then pretend like it doesn't exist until it needs to be 'used' again. Maybe by some miracle they will randomly give us another increase.
09-02-2012 10:46 PM
09-02-2012 10:56 PM
We did. I just checked online and noticed documents about the 'step' program. Explains the credit limit increase we got a few months ago. This forum is teaching me a lot.
I just hope this next payment shows we're responsible and able to pay our debts quickly and efficiently.
09-02-2012 10:59 PM
A few thoughts:
1. If your dealer already approved you for an auto loan it means they already pulled your credit report and approved you based on that data. You should be good. In order for them to know anything on your CC has changed they would have to do another pull and that is unlikely.
2. Your FICO score calculates utilization based on reported balance vs. credit limit at the time of the pull. As long as there is a credit limit reported, your high balance doesn't figure into your score. Yes a lender might be able to see that info, but it doesn't change scoring.
3. Your FICO score doesn't "remember" what your util was last month or any other time, it only looks at the current picture. If you max out a card and it reports as such that month, your score might take a hit that month. But as long as you pay it off and have a smaller balance and lower util the next month, you are not penalized for the past util and your score will instantly bounce back up.
You don't need to be terrified of credit cards as long as you use them properly - PIF and they can be a wonderful rewarding tool.